06-24-02 Utilities Committee - Laserfiche WebLink

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Utilities Committee June 24, 2002 Page 3 Mr. Lou Nanni, Vice-President of the University of Notre Dame, spoke against the Bill. Mr. Nanni questioned the fairness of the proposed rates, focusing on the "severity and suddenness"of the contents of the proposed Bill. The University of Notre Dame will experience their bill going from $625,000 to $2.5 million per year which results in an increase of 425%. Mr. Nanni stressed that 4 million dollars of the 6 million dollars which the City of South Bend is seeking in increased revenues would what Notre Dame and I/N Tech & I/N Kote would pay alone. Mr. Nanni questioned whether the rate increase is really needed? The University of Notre Dame cannot move, however they can look into having their own treatment facility which would ultimately result in a "loose/loose"situation for all parties concerned. Mr. William Hoye, Assistant General Counsel of the University of Notre Dame, spoke against the Bill. He noted that there is no justification being provided for this level of increase. He stated that there must be a "reasonable basis" clearly shown for rates, and that the City has failed to show that, especially for the increase proposed for those outside of the city limits. Mr. Paul Keiniff, Utilities Director of the University of Notre Dame, spoke against the Bill. The University currently divides its storm and sanitary wastes and sends a "pure stream of waste" to the City. He reaffirmed the University's intent to look at building their own plant as another viable alternative. Mr. Hoye stated that between the two (2) customers present at today's Committee hearing, $ 4.7 million would be raised which represents a disproportionate increase. More time is necessary to study and have discussions. The Council must have proper legal standing to justify the proposed rates which is currently not present. Rates must be fair and reasonable and must be based on the cost to provide services. The University pays all costs for their 6,200 foot line which is in need of replacement. None of the proposed improvements which the City is contemplating would benefit the University of Notre Dame, yet the University would be funding a major portion of the costs of those improvements. The proposed rates would result in being a dis-incentive to economic development at the very time that the City needs further development. Mr. Hoye stated that sewer profits reported by the City were: $900,000 in 1999 $1,000,000 in 2000 $1,100,000 as of June 30, 2001 Under the rebuttal portion,Mayor Luecke stated that members of the City Administration have met are providing information. The profit amounts are the amounts before capital programs. There are a variety of ways to assess costs and the Mayor stated that the City Administration would again look at their overall philosophy,and perhaps look at phasing in the proposed rates. Mr. Gary Gilot, Director of Public Works, stated that three(3) test years were looked at as the pro- forma basis for the rates. The City has a forecast of future capital needs, and has studied the aging combined sewer system. The bottom line impact is significant, however the City may be able to "tweak the rates"in order to work with major customers. Council Member King stated that there must be a sound strategy for developing economic development in the City of South Bend. All of the major customers should have been talked to before this Bill was even filed for Council consideration. Customers like the South Bend Community School Corporation and Allied Signal who are not present today should have been